AASBO Spring Conference March 28, 2013 Presented by: Lila McCleery – Phoenix Union High School District Market Basket Bids the “Meat and Potatoes”

Overview  What is a market basket bid?  Are market basket bids a new trend?  Why and when would I consider doing a market basket bid?  What are the advantages/disadvantages of doing a market basket bid?  How does evaluation of a market basket bid differ from a line item bid?  Will my market basket bid satisfy the auditors?

What is a Market Basket Bid? Standard Line Item Bid - SpecificationsStandard Line Item Bid - Pricing

Standard Market Basket Bid Specifications and Pricing

 No.  Not a new trend, but possibly not as utilized by some school districts as others Are Market Basket Bids a New Trend? Reasons to Use a Market Basket Bid:  Save Time and Money  Eliminate Duplication of Effort - multiple bids annually for the same commodity (i.e., art supplies, athletic supplies)  Provide Multiple Vendor Options for your End-Users  Detailed Control of Your Market Basket (sub-categories)

Why and When to do a Market Basket Bid  Multiple Category Bids (M&O Supplies)  Unknown annual quantities to be purchased or unable to identify anticipated needs  Too cumbersome to list items that you would list and evaluate in a line item bid.  Time/cost savings realized in evaluation  School/District is not required to purchase a certain quantity of any item(s)  Satisfy competition requirements for walk-in and in-store type purchases

What are the Advantages / Disadvantages ADVANTAGES  Time savings in bid preparation  Time savings in evaluation  Money savings (Time is Money!)  Easier bid management after award  Multiple award (more vendor choices for end-users)  Potential 5 year bid award  Significant percentage discounts  Specified category shipping  Flexibility in writing your response requirements (vendor must respond to at least 60% of the market basket to be considered)  Only one discount per market basket will be accepted. DISADVANTAGES  Better pricing could be achieved with a line item bid if specific quantities are known and purchased  Educating the end-users on proper use of contract award  No vendor response or poor vendor response on a specific category  Having to educate vendors on responding to this type of bid

How Does Evaluation of a Market Basket Bid Differ from a Line Item Bid?

 Truth is, it really doesn’t differ.  Evaluation should be performed by individual(s) with the expertise to determine “or equals”  Awarded vendors on each market basket are still determined by lowest responsible/responsive vendor.  Evaluation shouldn’t take as long as a multiple line item bid  Document your bid file on how you determined the number of awarded vendors. Example: 1.You have 7 line items in a specific bid category, and 5 vendors respond. If each vendor is the lowest priced vendor on a line item, then you could award that category to all 5 vendors. 2.You have 7 line items in a specific bid category, and 22 vendors respond. ABC Vendor is the lowest priced on each item, but there is a question as to whether ABC vendor will always have the item in stock for immediate delivery, you may determine to award the category to the top 2 or 3 lowest priced vendors. REGARDLESS of how you award, it should always be to the LEAST number of vendors required to meet your District’s needs.

Language That Should be in Your Bid

Will My Market Basket Bid Satisfy the Auditors? Yes!!!!!

If your Market Basket Bid is:  Thoughtfully prepared using a realistic market basket of commonly used items  Thoroughly documented – Why did you do what you did? Write it down.  Written determinations for multiple year bid and multiple awards (if required)  Fairly evaluated by individuals with the expertise to determine “or equals” Then……. The auditors should find no procurement discrepancies with your Market Basket Bid.

QUESTIONS